As we routinely deal with confidential information and are privy to commercially-sensitive information, we must take steps to ensure that the rights of our clients and former clients are protected. We are bound by our Regulator’s (IPReg) Code of Conduct and are required to have a procedure in place for managing conflicts of interest.
CODE OF CONDUCT – RULE 7 – CONFLICTS
A regulated person must not act where his interests conflict with those of a client or of a former client, or where he knows or has reasonable grounds for suspecting that the interests of any partner or regulated person or staff of his firm, conflict with those of a client or of a former client.
Provided in all the circumstances it is reasonable to do so, a regulated person may act for two or more clients, or for a client as against a former client, in relation to the same or a related matter in a situation of conflict, or possible conflict but only if all of the parties have given their informed consent in writing. Regardless of consent a regulated person must, however, refuse to act on behalf of conflicting or potentially conflicting parties in contentious matters, in circumstances where the regulated person’s actions would not be seen to be neutral or where accepting instructions from both parties would risk a breach of Rule 5 or if Rule 8 cannot be observed.
GUIDANCE
7.1 If a regulated person acquires or has acquired relevant knowledge concerning a current or a former client in the course of acting for that client in any capacity, the regulated person should not accept instructions to act against that client or should henceforth cease to act against that client. The term “relevant knowledge” should mean knowledge of the client or the client’s affairs that is not widely disseminated to the public and that is, or is likely to become, relevant to the action concerned against the client.
7.2 A regulated person must not allow any person to perform work under his supervision when the regulated person knows or has reasonable grounds for suspecting that such a person has a conflict of interest in respect of the work.
7.3 A conflict may not arise simply because the regulated person acts for two or more parties in the same general field of business or technology although on the facts it may do so. More typically a conflict arises by reference to the specific subject matter of a case. However, acting for two or more parties in the same general field of business or technology may give rise to issues of confidentiality under Rule 8.
7.4 Confidentiality safeguards within firms or between branches may be sufficient to “cure” conflict, provided informed written consent is obtained from all parties and suitable arrangements to ensure the confidentiality of information applying to each client are in place. Safeguards – within firms or between branches – cannot, however, “cure” conflicts to enable the same regulated person to act on behalf of opposing parties in a contentious matter.
7.5 All regulated persons should undertake a “conflict check” before taking on a new client. This may take whatever form is considered appropriate in all of the circumstances. The minimum expected is a check with all other relevant persons that acceptance of a named client is not likely to compromise the interests of a client already on the books.
7.6 Unless otherwise agreed, informed consent requires that the parties whose interests do or may conflict are notified in writing of the name(s) of the other party(ies).
7.7 Where there is conflict between the interests of a regulated person, and those of a client, neither informed consent, nor any other arrangement, will enable him to act for that client.
7.8 Nothing in these Rules prevents a regulated person from acting as a mediator between parties to a dispute provided the appropriate codes of practice which deal with conflict when acting as a mediator are observed.